- JPMorgan Chase is giving select customers early access to their direct deposits, a feature popularized by fintech rivals as it hopes to lure users into an overdraft-free checking account.
- The feature – which speeds up payments including payroll, tax refunds, pensions and government benefits by up to two days – debuts for Secure Banking customers starting this week.
- That usually means getting paid on a Wednesday rather than a Friday, the bank said.
JPMorgan Chase gives select customers early access to their direct deposits, a feature popularized by fintech rivals as it hopes to lure users into an overdraft-free checking account.
The bank is launching the feature – which speeds up payments including payroll, tax refunds, pensions and government benefits by up to two days – for customers in its Secure banking services product, starting this week, according to Ryan MacDonald, head of growth financial products for Chase.
That usually means getting paid on a Wednesday rather than a Friday, he said.
“Those few days are often the difference between digging for money from family or not paying that bill on time and being charged late fees,” MacDonald said in an interview.
JPMorgan, the largest US bank by assets, reaches this milestone as the industry faces increasing pressure regulators and legislators about overdrafts and other fees. While smaller rivals, including Capital one said they were scrapping overdraft fees, the CEOs of America’s three largest institutions have repeatedly refused calls to end the charges altogether.
Instead, banks have drawn attention to existing products that protect users from overdraft fees, while providing most of the features of full-service accounts.
For JPMorgan, that product is Secure Banking, which has no minimum balance requirement and costs $4.95 per month. The service, which is aimed at households earning about $55,000 or less a year, has about 1.4 million users, MacDonald said. Most customers have direct deposit and will automatically start receiving advance payments, he added.
The bank, which says it serves more than 66 million U.S. households overall, can be a “fast follower” to fintech rivals when they build much-needed functionality, MacDonald said. start-ups including Carillon and Running popularized early direct deposits as they gained millions of cost conscious users.
“Fintechs are doing a good job of entering the space and trying to disrupt by offering services,” MacDonald said. “Customers didn’t even think about early payment access until some of these players arrived. As we’ve assessed, we think there’s a real need for some customers to have this. .”
Unlike new app-dependent players, JPMorgan’s value proposition includes both digital services and an extensive physical network of approximately 4,700 branches and 16,000 ATMs, the executive said.
The bank is working on introducing other solutions for this group, including small loans or installment products, to help users smooth out their financial needs in times of emergency, he added.